Canadian securities regulators are extending the deadline for crypto platforms to rein in trading of stablecoins that are tied to the value of a traditional currency.
Last year the Canadian Securities Administrators (CSA) set a deadline of April 30 for regulated crypto firms to stop allowing trading in stablecoins unless they complied with guidance, set out in a staff notice, designed to address the regulators’ investor protection concerns.
That deadline was later pushed back by six months to the end of October, and now, the regulators are giving the crypto industry until the end of the year to comply.
“The extension is intended to provide more time for [crypto platforms] to either comply with the terms and conditions of their registration and exemptive relief decisions … or to propose alternatives that address investor protection concerns,” the regulators said in a release.
The CSA has long voiced concerns about the risks posed by stablecoins, noting, “Investors have experienced significant harm from the collapse of unregulated [stablecoins], other [stablecoin] market disruptions and the activities of unregistered crypto market participants.”
Absent the development of standards for stablecoin issuers, including conduct, disclosure and financial requirements, the regulators said they “continue to have investor protection concerns with the trading of these investment products in Canada.”
However, the regulators have proven reluctant to impose an outright ban on stablecoin trading, allowing firms to continue trading stablecoins that are pegged to a specific fiat currency, in the absence of specific investor protections.
“The CSA has actively engaged with [crypto platforms] and crypto industry participants and remains open to proposals for alternative ways to address investor protection concerns raised by [stablecoins],” the regulators said in Thursday’s release.